THE CITY'S FINANCES

Evening Star, Issue 17429, 12 August 1920, Page 3

THE CITY'S FINANCES

'M RECORD TEAR, FINANCE CHAIRMAN'S SUMMARY, TOTAL INCOME—£42I,B3O. mf The principal matter discussed by the City Council at a special meeting last night was the financial operations of the City during the post 12 months, which created a record both in relation to revenue and to profit made. Cr Taverner (chairman of the Finance Committee) gave an interesting and illuminating review of the situation, commencing by expressing satisfaction at the respite as affording first-hand' evidence that Hie various departments have been managed in an efficient manner. PROGRESS OP TRAMWAYS. “The salient feature in the increase of income by £57,298 is that represented by the tramway department,” said Cr Taverner. “ Against an increase of only £502 in 1919 over 1918, we have an accretion this year of £24,102, This largely represents the fares paid by an additional 2,200,000 passengers carried; and while it is evident that the extra rolling stock is urgently required, it is of interest to note that the passengers carried per car mile were only increased from 12.60 to 15.11. The explanation lies in the fact that 153,333 additional miles were covered, and a close scrutiny of the details of this department discloses tha fact that it has been efficiently managed. The Mornington tramway returns also show a satisfactory position, a small profit being shown for the first time since the service was taken over by the City,” PROFITABLE ELECTRIC DEPARTMENT. “The electric department has also increased revenue of over £B,OOO, and it ia of interest to note that ‘ lighting ’ has produced £3,297 and ‘ poVer ’ £3,569 of the increase. Nearly 1,000 new consumers have been connected during the year, and have contributed to the result shown. The gas department shows an increase of £9,817, and it is of interest to note t.bi« arises from the fact that the increased price produced £4,700 and the sale of the additional output amounted to £5,567. FINANCIAL POSITION ADVANCES BY £90,963. “As mentioned previously,” continued the chairman, “the year under review has produced a greater net profit than any previous year, the figures being £56,314 — an increase over last term of £10,000; and, as the Town Clerk remarks on page 92 of the report, the total advancement in the finanoal position of the City has been £90,963. It can justly be claimed that this result has been achieved without placing an undue burden on those who purchase the various commodities and services supplied by the City, for. to-day the people of Dunedin have cheaper gas, electricity, and tram fares than do the inhabitants of the other chief centres, and in the matter of rates we also compare favorably. DEPOSITS AT CALL. Cr Tavener continued: “The deposits amounted to £138,000 at date of balance. Reference has been made recently that more use could be made of money received as temporary loans, that is, deposits payable at call, and. in reply to that it may be stated that all the money that was required was taken, and various sums were declined because they _ were not required. In this relation it should be noted that the limit to which use can be made of “call” money is the daily requirement which would otherwise be supplied by the bank overdraft. Such deposits cannot be used for any permanent financing, and what the treasurer aims at is to synchronise as nearly as possible the overdraft and the temporary loan account, this proceedure resulting in a substantial saving of interest. OTHER FUNDS AND MATURING LOANS. The insurance funds continue to have but little claim made upon them, the balance at March 31 being £15,87 L It is much too early to warrant us in claiming that the undertaking is a financial success, but it is obvious that every successful year makes the position more secure. The renewal funds now amount to £317,389, and represent an asset of great importance and, one which is destined te exercise a distinct modifying influence on the future financial operations of the City. The phase of the subject now being dealt with by the Finance Committee is that suggested by the Town Clerk, wherein it is recommended, to utilise a portion of the fund to augment the sinking funds available in connection with the maturing loans in 1922, when we shall be called upon to provide for £516,0C0. Should the council eventually decide to use a portion of the renewal fund in the manner suggested, it will then be an opportune time to review the whole question of renewal provision with a view to reducing the annual contributions, and if such a course is found to be advisable, I think the Tramways and E.P. and L. Departments could consider the advisability of diverting some portion of the annual surplus by establishing an extension fund. Such provision would enable the Tramways Department in particular to carry out new works without the necessity for establishing a new “policy” every .time an extension is mooted. REVISION OF ASSETS. This time, when profits earned showsuch a satisfactory increase, is favorable for a revision of the assets valuations. The natural tendency of too many concerns is to retain the paper value of assets during a period of leaser profits, and in times of increase to utilise the additional profits for other purposes. Now prudence dictates that a more sound policy would be vigorously to write down paper valuations when circumstances are propitious enough to allow of it. In our case all departments have assets_ which can with advantage be so dealt with, and I propose during the present year to go into the whole matter in the way indicated. In 1917 the tramways department wrote £8,406 off the horse-car purchase account, and I expected this year to see tha balance of £IO,OOO also expunged. _ There are other items of paper assets in this department that should also be written down. If the water department care te purchase the Lee Stream headworks, then it should be sold to that department, but otherwise it should be written off. Under this head it is gratifying to see that such a course has been adopted in the E.P. and L. department. no less a sum than £15,000 being written off preliminary expenses, law costs, and loan discounts accounts. The gas and water departments, while possessing assetsof a more tangible nature than those previously mentioned, seem to indicate that a careful revision is due. To assess our water reserves, reservoirs, and plant at £400,000 seems to require some amount of justification, seeing that the bulk of the expenditure so represented is old, and must be of leas value that formerly. Superficially considered, it may be thought that sufficient provision is being made in this connection, but it must be remembered that tha cleaner the balance-sheet is from such non-reahsable assets the merra attractive will our future issues of debentures appear to the investing public. THE DISCUSSION. . Cr Douglas expressed his appreciation of the loyal support received by tha Tramways Committee from the tramways manager, the staff, and the Town Clerk. He mentioned that permission had now been received to remove centre poles in certain streets. The committee intended to go on with extensions. Tbeywere now negotiating with the Public Works Department for a proper verandah in the vicinity of the Customs-house. Or Walker thought that the chairman of the Finance Committee was to be congratulated on placing the affairs of the council before members in such a lucid manner. The whole result was most satisfactory. He might state that whatever the result of the new loans might be, they would have to pay an increased tale

, Interest. The council had a most ex csllent officer in Mr Lewin, who in hi diagrams in his annual report had placet whole position before them in tin c earest maimer possible. He (the speaker thought that if they were going to con tinuo to progress they should relieve M i-iewin of a number of his duties, so tha l he could devote more of his time to tin de P arlments - (Hear, hear.) Ur Hayward confined his remarks large! to the progress of the library. The pas year, he said, had been the most success iniri history of the institution. I: . 15 the total of books issued was 151,698; in 1920, 223,347; and in the juvenile de partment the respective numbers weri 14,311, and 36,892. These results hac been achieved without accretions to thi staff, but that could not continue. Ii view of the increasing cost of books, etc. the allocation must be increased, and th< council must determine how far they wer< prepared to go with a department thabrought no revenue. In other cities : charge of 10s a year was made to helj pay the way of their free public libraries As an indication of the position, Cr Hayward stated finally that while the ex pendituro last year was £2,608, the esti mated expenditure this year was £3,118 Cr Jeffery said the tramways department was doing good work under Ci Douglas, but be was cramped. In thi; department and others, he thought thai the profits should be spent within thi departments for extensions, instead o being used to relieve rates. The tram way* system might have been extends* indefinitely, and oven if run at an ostensible loss would be a civic service in tak ing the people away out and relievinj congestion. There would result, with pos sible loss on tramways, gains to the gas water, and rating departments, as wel as the enormous moral advantage. Cr Clark pointed out the illogicality o: Cr Jeffery’s attitude. In one breath hi stated that all profits should be used foi extensions; in the next he mentioned sub sidisation of various educational institu tions. _ He proposed to reduce the incomi materially, and to find extra moneys al the same time for various laudable purposes. “He seems to think,” he said “that we are a band of marauders, whe can steal forth and prey upon the un happy ratepayers when we will.” The council’s method of finance was designee to meet the future; the trading depart merits were on a sound ‘basis, and they hoped to leave an asset to posterity ir their trading concerns that could be ex tended indefinitely. Money could not bi got by the wave of a wand; and the conn cU were concerned in these days of haul ship to ease as far as they could the burden that rested upon the ratepayers. Thi reports they were getting now were a last ing monument to the skill and - extra ordinary knowledge of their Town Clerk, Cr Scott remarked that Cr Jeffery might be called the fault-finder of the council, and someone had remarked “that it took less intelligence to he a fault-finder than for any other occupation in the world.” He would like to hear Cr Jeffery offer—as he bad not done to dale—some explanation how the money was to be found for all the good things he predicated as desirable. Cr Scott proceeded to make reference to the financial problem disclosed in reference to the baths, with its £17,000 expenditure. Cr Sincocfc said he was satisfied that they would have to look farther afield for the disposal of the City’s refuse. He was sorry that Cr Shaddock was not present. He was satisfied that that gentleman, as chairman of the Electric Power and Lighting Committee, was working on safe lines. If they could help the people of Bruce, and even those farther afield, by giving them power, then they should do so. The Electric Power and Lighting Committee were determined to continue a policy of progress. There was no centre in the Dominion doing more for its people than was being done here. Cr Wilson said that the works in the City were being hampered for the want of cement They hoped, however, that this would be overcome before long, or if not it would binder the main work tc be done after the spring—namely, the permanent paving of Lower High street and also Cumberland street. Cr Taverner replied, and the discussion then ended.